Daniel Leussink
BEIJING (Reuters) – Japan. Toyota Motor (NYSE:) will merge with China’s Tencent, and Nissan (OTC:) will merge with Baidu (NASDAQ:), the companies said Thursday. Cross-border partnerships highlight the importance of artificial intelligence for automakers.
Separate announcements from Japan’s two biggest automakers at the Beijing auto show also underscored Japanese manufacturers’ efforts to cope with sweeping technological shifts that have undermined their once enviable positions in the Chinese market.
Just a few years ago, Japanese car companies were among the most famous foreign brands in China. More recently, they have found themselves in disarray as local manufacturers led by BYD (SZ:) have grabbed market share with software-powered electric vehicles aimed at young drivers.
Both Tencent, the gaming and social media giant, and Baidu, China’s leading search engine, have been leaders in the country’s generative artificial intelligence race.
Toyota, the world’s largest car maker by volume, will incorporate tech giant Tencent’s technology into a Chinese-made passenger vehicle that goes on sale this year, said Toyota’s Yiming Xu, director of brand and communications in China.
The companies will offer services by leveraging Tencent’s strengths in big data, artificial intelligence and cloud computing, Xu said.
This was announced by Nissan and Baidu, who signed a memorandum of understanding to conduct research in the field of artificial intelligence and so-called “smart cars.” Nissan will use Baidu’s generative artificial intelligence on its platform to explore future technological developments, it said.
The company will also equip its Chinese cars with Baidu’s artificial intelligence products, he said.
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The partnerships also show how competitive China has become for automakers, even global giants such as Toyota.
Foreign automakers are struggling to prove they can remain relevant in China amid pressure from the shift to electric vehicles, the rise of domestic brands and a price war.
Toyota’s sales have fallen, although it has managed to avoid the sharp blows that Honda (NYSE:) Motor and Nissan took it.
The company’s sales in China fell 1.7% to 1.9 million vehicles in 2023, the second year in a row.
Toyota also showcased two new battery electric vehicles for the Chinese market at the Beijing show.